Renowned attorney Bennett to represent Megaupload

Dotcom was one of four men arrested in an investigation of the massive file-sharing website led by the U.S. Federal Bureau of Investigation, but he wasn't cooperative in the slightest, Reuters reports.
Dozens of police officers, with helicopters flying overhead, broke into Dotcom's mansion, which sits on farmland and is believed to be worth $30 million in New Zealand dollars, after he refused to let them in.


"Despite our staff clearly identifying themselves, Mr. Dotcom retreated into the house and activated a number of electronic-locking mechanisms," detective inspector Grant Wormald said.
That forced the police to break the locks, with Dotcom -- also known as Kim Schmitz -- barricading himself into a safe room that officers had to cut through in order to gain entry.
"Once they gained entry into this room, they found Mr. Dotcom near a firearm which had the appearance of a shortened shotgun. It was definitely not as simple as knocking at the front door," Wormald said.


New Zealand police raided several homes and businesses linked to Dotcom and seized guns, millions of dollars and nearly $5 million in luxury cars, officials said.


In Hong Kong, where Megaupload is based, customs officials said they seized more than $42.5 million in assets. They said the company operated out of luxury hotel space costing more than $12,000 a day, and they seized high-speed servers and other equipment from the offices.


The shutdown and indictment generated headlines around the world in part because of the size and scope of Megaupload’s operation. Sandvine, Inc., a Canadian company that provides equipment to monitor Internet traffic, said the website alone accounted for about 1 percent of traffic on U.S. cable and DSL lines. The site is even more popular in many foreign countries.


Bennett said that "we intend to vigorously defend against these charges" but declined to comment on the case in detail.


Bennett is best known for serving as President Bill Clinton’s attorney when he was accused of sexual harassment by Paula Jones. He has also represented Defense Secretaries Clark Clifford and Caspar Weinberger.


Megaupload was no stranger to accusations that its website existed for the sole purpose of mass copyright breach. Before its website was taken down, Megaupload offered a more detailed defense of its operations, claiming in a statement that such accusations are "grotesquely overblown."


The company said it had a clear, easy-to-follow procedure if movie studios or other copyright holders saw that their products were being illegally shared on Megaupload, and said that it responded to those "takedown notices" as required by law.


"Of course, abuse does happen and is an inevitable fact of life in a free society, but it is curbed heavily and efficiently by our close cooperation with trusted takedown partners. It is just unfortunate that the activities of a small group of `black sheep’ overshadows the millions of users that use our sites legitimately every day," the statement said.


Indeed, sites like megaupload.com, known as cyberlockers, can fulfill legitimate needs and are used every day by people looking for an efficient way to share or transfer large files that can’t easily be sent by email.


In their indictment, however, federal prosecutors offered a detailed glimpse of the internal workings of the website. They allege that Megaupload was well aware that the vast majority of its users were there to illegally download copyrighted content.

U.S. Government Kills Megaupload

WASHINGTON — Caving to a massive campaign by Internet services and their millions of users, Congress indefinitely postponed legislation Friday to stop online piracy of movies and music costing U.S. companies billions of dollars every year. Critics said the bills would result in censorship and stifle Internet innovation.
The demise, at least for the time being, of the anti-piracy bills was a clear victory for Silicon Valley over Hollywood, which has campaigned for a tougher response to online piracy. The legislation also would cover the counterfeiting of drugs and car parts.
Congress' qualms underscored how Internet users can use their collective might to block those who want to change the system.


This, to me, is the most interesting situation since the days when the leader of Panama, Manuel Noriega, was dragged out of his bed and thrown in a Florida prison for trafficking drugs.
While this is all very amusing, you have to wonder who at Megaupload wasn't playing the game right since there are overt music and video trading sites scattered around the globe. Worse yet, what about the facilities that actually manufacture DVDs and make them available throughout Asia for $2 a disc? You can walk into stores and buy the discs. Where is the abatement of this problem? It has to be worse than the inconvenience of downloading moves so you can watch them on the laptop. Yes? No?
More importantly, once in a while the average user will need to upload and download massive and legal files, but any system that can transfer files larger than 600MB, I assume, will be scrutinized. This means that the Justice Department will target Dropbox and other handy utilities.
In the meantime, everyone should look at personal alternatives to file transfer. Start by learning about FTP.
Whatever the case, the situation with the folks from Megaupload will inspire some sort of a farcical movie. All the characters were living a high life on a reported advertising and subscription income of $175 million, so apparently, Ferraris, Rolls-Royces, and hookers were abundant. I'll probably wait to watch this movie on HBO.

SOPA is dead, Feds shut down Megaupload

In the battle between Hollywood and Silicon Valley over the proposed new stringent anti-piracy laws known as SOPA (the Stop Online Piracy Act) and PIPA (the Proctect Intellectual Property Act), Wednesday's blackout protest that saw several major websites going on strike for a day seemed like a practical but largely symbolic public relations gesture. On Thursday, however, the battle suddenly gained a body count, first with the government's forced shutdown of online storage service (and reputed pirate haven) Megaupload, and then with a retaliatory hack attack against the Justice Department and entertainment lobbyist websites by the hacker collective Anonymous. On Friday morning, in the wake of the turmoil, Senate Majority Leader Harry Reid decided to table the vote on PIPA that had been scheduled for next Tuesday, and Rep. Lamar Smith, the sponsor of SOPA, said he'd postpone his efforts to get the House Judiciary Committee to vote on his bill.


Megaupload is one of the most popular Internet services that lets users transfer large documents, music, photos, and movies anonymously. The movie and music industry has accused Megaupload in the past of copyright infringement.


A New York Times report shows Megaupload, run by Kim Schmitz, also know as Kim Dotcom, of causing $500 million in damages to copyright owners and generating more than $175 million in ad revenue and selling premium subscriptions to users.


Authorities arrested Schmitz today at Dotcom Mansion in Auckland, New Zealand this morning. The 37-year-old Schmitz fled to a safe room and police "had to cut their way in," reports show. When police entered the safe room, Schmitz was found with a shotgun at his side.


"It was definitely not as simple as knocking at the front door," detective inspector Grant Wormald told the New York Times.


Reports show officers seized $4.8 million in luxury automobiles, including a Rolls-Royce Phantom Drophead Coupe and a pink 1959 Cadillac. Myriad artworks and electronics also were taken from the estate.


On Thursday, several Internet sites like Wikipedia, Reddit, and Boing Boing, among others, protested the Stop Online Piracy Act (SOPA) and Protect IP Act(PIPA) by enacting "blackouts" that temporarily shut down their services.
Other sites like Firefox and Google showed their support by explaining the ramifications of PIPA and SOPA, but they didn't interrupt service to Internet users.

F.B.I. Closes a Top File-Sharing Site

Justice Department's massive copyright case against the file-sharing website Megaupload.com had the Internet world hopping this week. But it also got lawyers talking, about the scope of a criminal investigation that spanned eight countries and the hard-nosed tactics that the government deployed.


Prosecutors and FBI agents who built the case against Megaupload call it an international crime ring - a racketeering enterprise, like the mob or a drug gang, that made $175 million from pirated movies and music since 2005 and cost copyright holders nearly half a billion dollars more.


Starting last August, the U.S. worked behind the scenes with law enforcement counterparts in New Zealand, whose organized crime unit and police moved in to arrest the company's flamboyant founder Kim Dotcom at his mansion near Auckland Friday.


That was a little much for electronic privacy advocate Corrine McSherry, an attorney at the Electronic Frontier Foundation.


"What we're talking about here is, you know, copyright infringement," McSherry says. "And that may be a serious problem, but it's a little bit chilling if that can get you dragged from your house in the middle of the night."


It's not just rousting people out of bed or executing search warrants in eight different countries. From the indictment, it's clear the Justice Department pulled out all the stops, getting a judge's permission to try to put the Hong Kong-based company out of business by seizing domain names and, according to one federal source, getting a judge to approve search warrants for private emails that Megaupload officials were sending to each other.


Four of the seven people, including the site’s founder, Kim Dotcom (born Kim Schmitz), have been arrested in New Zealand, the authorities said; the three others remain at large. Each of the seven people — who the indictment said were members of a criminal group it called “Mega Conspiracy” — is charged with five counts of copyright infringement and conspiracy. The charges could result in more than 20 years in prison.


As part of the crackdown, more than 20 search warrants were executed in the United States and in eight other countries. About $50 million in assets were also seized, as well as a number of servers and 18 domain names that formed Megaupload’s network of file-sharing sites.


Ira P. Rothken, a lawyer for Megaupload, said in a phone interview on Thursday that “Megaupload believes the government is wrong on the facts, wrong on the law.”


The case against Megaupload comes at a charged time, a day after broad online protests against a pair of antipiracy bills in Congress, the Stop Online Piracy Act, or SOPA, in the House, and the Protect I.P. Act, or PIPA, in the Senate.


The bills would give federal authorities expanded powers to crack down on foreign sites suspected of piracy. But technology companies and civil liberties groups say that the powers are too broadly defined and could effectively result in censorship. On Wednesday, Google and Wikipedia joined dozens of sites in political theatrics by blacking out some content and explaining their arguments against the laws.


Anonymous, which has previously set its sights on PayPal, Sony and major media executives, was more blunt in its response. The group disabled the Justice Department’s site for a time, and it also claimed credit for shutting down sites for the Motion Picture Association of America and the Recording Industry Association of America, two of the most powerful media lobbies in Washington, as well as those of the Universal Music Group, the largest music label, and BMI, which represents music publishers.

Hong Kong Freezes Megaupload Assets

New Zealand police on Saturday revealed bizarre details of the arrest of the suspected kingpin of an Internet copyright theft case against the James Bond-like backdrop of a country mansion hideaway with electronic locks, a safe room and a pink Cadillac.


German national Kim Dotcom, also known as Kim Schmitz, was one of four men arrested on Friday, a day before his 38th birthday, in an investigation of the Megaupload.com website led by the U.S. Federal Bureau of Investigation.


The group was accused of engaging in a scheme that took more than $500 million away from copyright holders and generated over $175 million in proceeds from subscriptions and advertising.


A police official said dozens of officers, backed by helicopters, forced their way into the mansion, nestled in lush, rolling farmland, after Dotcom refused them entry, a scene more reminiscent of a high-octane spy drama than the usual policeman's lot in rural New Zealand.


It was another in a series of international repercussions arising from the shutdown. Megaupload is registered in Hong Kong. Four company employees, including Kim Dotcom—named in the FBI indictment as the company's founder and until last year its chief exectuive—were arrested in Auckland, New Zealand.


In a statement Friday, Customs said "targeting the organised and transnational nature of intellectual property-infringing activities in the wake of technology development, the Hong Kong Customs will continue to monitor the situation and co-operate with the intellectual-property-rights industry and overseas law-enforcement agencies so as to suppress infringing activities effectively.

New Zealand reveals high-octane arrest in Internet fraud case

The Justice Department's massive copyright case against the file-sharing website Megaupload.com had the Internet world hopping this week. But it also got lawyers talking, about the scope of a criminal investigation that spanned eight countries and the hard-nosed tactics that the government deployed.


Prosecutors and FBI agents who built the case against Megaupload call it an international crime ring — a racketeering enterprise, like the mob or a drug gang, that made $175 million from pirated movies and music since 2005 and cost copyright holders nearly half a billion dollars more.


Starting last August, the U.S. worked behind the scenes with law enforcement counterparts in New Zealand, whose organized crime unit and police moved in to arrest the company's flamboyant founder Kim Dotcom at his mansion near Auckland Friday.


That was a little much for electronic privacy advocate Corrine McSherry, an attorney at the Electronic Frontier Foundation.


German national Kim Dotcom, also known as Kim Schmitz, was one of four men arrested on Friday, a day before his 38th birthday, in an investigation of the Megaupload.com website led by the U.S. Federal Bureau of Investigation.


The group was accused of engaging in a scheme that took more than $500 million away from copyright holders and generated over $175 million in proceeds from subscriptions and advertising.


A police official said dozens of officers, backed by helicopters, forced their way into the mansion, nestled in lush, rolling farmland, after Dotcom refused them entry, a scene more reminiscent of a high-octane spy drama than the usual policeman's lot in rural New Zealand.


"Despite our staff clearly identifying themselves, Mr Dotcom retreated into the house and activated a number of electronic-locking mechanisms," said Detective Inspector Grant Wormald from the Organised and Financial Crime Agency New Zealand.


Officers broke the locks and Dotcom barricaded himself into a safe room which officers had to cut their way through to gain access.


"Once they gained entry into this room, they found Mr Dotcom near a firearm which had the appearance of a shortened shotgun," he said. "It was definitely not as simple as knocking at the front door."


Two firearms were seized and a 55-year-old New Zealand man has since been charged with illegal possession of a pistol. Computers and documents were also retrieved and more than NZ$10 million ($8 million) was seized from financial institutions.


Television footage showed vehicles, including a pink Cadillac and a Rolls-Royce Phantom Drophead Coupe, being removed from the property.


The house where Dotcom was arrested was one of the largest and most expensive in the country, worth around NZ$30 million.

Megaupload.com Gets Hit by Mega Piracy Indictment; Hackers Attack Feds

Although the sites they operate advertised that they provide personal storage for users' content, the indictment claims they actually trafficked in hosting television shows and movies -- often offering them to users before their official release.


"Members of the Mega Conspiracy are aware of the way that their sites are actually used by others; have themselves used the systems to upload, as well as reproduce and distribute, infringing copies of copyrighted content; and are aware that they have financially benefited directly from the infringement of copyrighted works that they are in a position to control," the indictment reads.


Kasseem Dean, best known as music producer "Swizz Beatz" and as the husband of Alicia Keys, is not named in the indictment, even though he reportedly serves as Megaupload's chief executive officer.


Megaupload and its sister sites accept online advertising and generate more than $175 million annually, according to a U.S. Justice Department indictment.


The copyright violations are on the order of $500 million in damages, according to the indictment.


The owners and operators of the sites are charged with five counts of copyright infringement and conspiracy. In an announcement, the Justice Department said it ranks "among the largest criminal copyright cases."


It also comes as two bills that would give the Justice Department broader authority to crack down on internet piracy have been hobbled by protests from companies such as Google and Twitter. Tech companies claim the legislation would violate the First Amendment.


An hour after the indictment was announced, the Justice Department's website, www.justice.gov, came under cyberattack. Anonymous, the hacktivist computer group, claimed responsibility.


Asked about the claims by Anonymous, a Justice Department spokeswoman said, "The Department of Justice Web server hosting justice.gov is currently experiencing a significant increase in activity, resulting in a degradation in service. The department is working to ensure the website is available while we investigate the origins of this activity, which is being treated as a malicious act until we can fully identify the root cause of the disruption."


The Justice website appeared to be back online this evening, but with limited graphics and pictures.


The FBI's website also appeared briefly to be inaccessible, but later came back online.


The attacks appeared to be distributed-denial-of-service attacks, rather than hacks in which data was compromised or lost. Distributed-denial-of-service attacks flood Internet sites and computer networks with requests for information and commands, making the networks and websites unavailable to computer users.


Members of Anonymous were sending around a link that appeared to help contribute to the attack, with some computer users sending requests to FBI.gov and justice.gov when they clicked the link.

Megaupload

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